富通保險 深入研究使用Pools為脆弱地區提供財產災難保護.pdf

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1、SINGAPORE ACTUARIAL CONFERENCE 202426-29 August 2024Avoid filling this space with text,will not be seen by audienceTo Pool or Not to Pool?A Dive into the use of Pools to provide Property Natural Hazards protection to vulnerable areasOverview of APAC PoolsCREIP,2015(CCIP 2024)Perils:EQ(2015),All natu

2、ral hazards(2024)GWP:$?TCIP,1999Perils:EQ+RelatedGWP:$142m Sri Lanka NNDIS,2016Perils:All natural hazardsGWP:$1m SEADRIF,2019Perils:Flood so farGWP:$5m Maipark,2003Perils:EQ+RelatedGWP:$21m Japan Residential EQ,1966Perils:EQ+RelatedGWP:$2.26bnTaiwan Residential EQ,2001Perils:EQ+RelatedGWP:$142m ARPC

3、 Cyclone Pool,2022Perils:TC+flood followingGWP:$623m PCRIC,2016Perils:TC,EQ,Tsunami,XS rainfall,DroughtsGWP:$1m NZ NHC,1944(2023 current format)Perils:War,EQ+Related(1944),All Hazards excl War(2023)GWP:$462m All GWP shown in USDPool Proliferation Why is it Happening?1.Increased levels of Nat Cat eco

4、nomic losses Expansion of residential dwellings into vulnerable areas leading to losses from natural hazards.Climate change potentially resulting in larger/more frequent natural catastrophes.2.Increased Public Sector Appetite to Participate in Natural Hazards Protection Governments and global public

5、 sector organisations increasingly aware of importance of insurance affordability and penetration.Insurance is no longer solely provided by private sector.Media effectively highlighting impact of catastrophes:becoming a relevant political topic.3.Increased pricing granularity in de-tariffed markets

6、Stratification Unaffordable premiums in high-risk areas.Insurance is based on principle of pooling yet“pricing progress”smaller risk buckets less pooling!Insurers have no incentive to cross-subsidise risk,so governments step in to ensure“fairness”.SINGAPORE ACTUARIAL CONFERENCE 202426-29 August 2024

7、Avoid filling this space with text,will not be seen by audienceCase StudiesARPC Cyclone PoolHistory:Set up by Australian Reinsurance Pool Corporation(ARPC)on 1st July 2022.Aim:Make cyclone cover accessible and affordable for all Australians.Government response to severe increases in Northern Austral

8、ia property premium rates.Cover:Cyclone damage and cyclone-related flood,with hours clause of 48 hrs.Household,strata and small business policies eligible.Pricing:ARPC calculate cyclone RI premiums which include some cross-subsidies,as well as risk mitigation discounts(see appendices).Insurers retai

9、n control over gross premiums.Pooling Arrangement:ARPC reinsure cyclone risk from direct insurers.Compulsory for authorised insurers with eligible GWP AUD 10m(USD 6.8m)to join pool.Admin:Pool run by ARPC,but insurers handle claims.Government monitors premiums to ensure savings are passed to policyho

10、lders.Risk Spreading:No RI purchased to keep costs low,but a AUD10 bn(USD 6.8bn)government guarantee exists.ARPC want to risk-share with insurers from 2025 onwards.Use of Surplus:Any profits cover OPEX and eventually could be distributed back to the government.ARPC plan to use data collected to info

11、rm Government disaster response plans.ARPC Cyclone PoolSINGAPORE ACTUARIAL CONFERENCE 202426-29 August 2024ARPC Cyclone PoolStrengths Strong government guarantee.Clearly defined coverage and participation mandatory with mechanism for enforcement.Claims handling expertise and capabilities of insurer

12、utilized.Premium discounts available for mitigation work.Intention of using data to guide government disaster response.Weaknesses Short hours clause,potentially due to cost-neutral commitment made by government.No deterrent for future homes being built in high-risk cyclone areas.Secondary perils mai

13、n driver of recent premium increases;Cyclone Pool doesnt address this issue.As of December 2023,premiums still far more expensive in Northern Australia vs rest of country.No contribution from postcodes for which cyclone risk deemed immaterial(e.g.,South Australia,Tasmania).No RI protection,so govern

14、ment potentially exposed to loss volatility.Turkish Catastrophe Insurance Pool(TCIP)History:Set up by the Turkish government with the help of the World Bank following a catastrophic earthquake in 1999.Aim:Providing financial security to homeowners against earthquakes.Cover:Earthquake property damage

15、 up to USD 38k,including any consequential perils with a 2%deductible and hours clause of 72 hours.Cap increased each year in line with inflation.Pricing:TCIP set EQ tariffs which determine the premium rates.Differentiated based on 7 geographic zones and two building types(see appendices for details

16、).Pooling Arrangement:Compulsory for homeowners in urban areas.The pool provides insurance guarantee to insureds,with ultimate funding by the Government.Admin:By technical operator among the insurers selected by the Government.This includes claims handling:insureds directly submit claims to the TCIP

17、.Risk Spreading:Extensive RI purchased from international markets.Use of Surplus:Surplus is primarily either reinvested in TCIP Fund or used for research.Turkish Catastrophe Insurance Pool(TCIP)Strengths Diversification benefit across the country given EQ cover is compulsory for all urban residences

18、.Premiums charged are partially risk-based,providing some incentive to build with reinforced concrete.Collaboration with and support from international RI market,led to fast payments following 2023 EQs.Centralised resources e.g.disaster call center,loss adjustors,claims handler for quick disbursemen

19、t.Penetration of 58%for EQ insurance,one of the worlds highest rates.Only 5%before the pool was set up.Weaknesses Lack of enforcement for compulsory earthquake coverage.Government trying to change this by offering discounts upon renewal and increasing distribution channels.Does not cover multiple pe

20、rils,so no diversification benefit by peril.Minor issue since EQ is key peril in Turkey.Does not embed earthquake mitigation measures in addition to indemnification.Underinsurance evident in 2023 EQs:cover cap too low.Taiwan Residential EQ(TREIF)Aim:Increase take-up rates for EQ insurance and reduce

21、 the financial burden to the government.Cover:EQ+related perils.Residential buildings only with SI=USD 47k.Contingent living expenses of USD 6k.Pricing:All residential fire insurance policies must include basic coverage for EQ risk,flat premium of USD 42.Risk Spreading:Losses are split into two tier

22、s:Tier 1 Up to NTD 5bn(USD 157m)Loss covered by the Co-Insurance Pool,managed by TREIFTier 2 NTD 5bn to NTD 120bn(USD 157m to 3.77 bn)Assumed by TREIF and spread between:TREIF reserves Domestic&Overseas reinsurance markets GovernmentSINGAPORE ACTUARIAL CONFERENCE 202426-29 August 2024Taiwan Resident

23、ial EQ(TREIF)Strengths Non-profit statutory insurance“benefit ourselves as well as others”.Ensured that all fire policies now include EQ cover.Stable flat pricing makes insurance affordable to all.Weaknesses Pricing does not reflect the risk characteristics of the property,so no incentive to mitigat

24、e risk.Does not cover multiple perils,so no diversification benefit by peril.Typhoon also a key risk in Taiwan,which the pool does not address.Relatively low take-up rate despite flat pricing:only 39%of households have cover.NZ Natural Hazards Commission Toka T AkeHistory:Started as Earthquake and W

25、ar Damage Commission in 1945;restructured by Earthquake Commission Act,1993 and the Natural Hazards Commission Act 2023.Aim/Cover:First-layer residential insurance against Earthquake,Landslips,Tsunami,Volcanoes,Hydrothermal activity,Storms and Floods.Building cover cap of$300,000(USD 186k).Land cove

26、r cap is calculated using a pre-defined formula.Pricing:NHI Levy of 16c per$100 of SI through homeowners fire insurance policies.Admin:The NHI Act establishes a Crown entity,Natural Hazards Commission Toka T Ake(NHC).Risk Spreading:Any shortfall in the claims payments due after exhausting the NDF an

27、d Reinsurance cover is fulfilled by the Government,either as a loan or as a grant.Use of Surplus:Any profits contribute towards the Natural Disaster Fund(NDF),research activities.NZ Natural Hazards Commission Toka T AkeStrengths Crown guarantee comes with an assurance to the insured that the claim w

28、ill be paid in all situations.Clearly defined coverage and participation mandatory with a mechanism for enforcement through a levy.Claims handling expertise and capabilities of insurer utilized.Premium isnt fully risk-based,making it affordable even for high-risk properties.Third-party Reinsurance c

29、overage means that risk is diversified away in the international markets.Weaknesses Pricing isnt fully risk-based,so less motivation to invest in risk-mitigation measures by the high-risk insureds.Levy isnt sufficient to cover the projected cost of claims,so it is not self-sustaining.Crown Guarantee

30、 means the risk isnt being managed by the private players,so it still a budgetary liability.Summary of PoolsDetailsAustraliaTurkeyTaiwanNew ZealandName/AgencyARPCTCIPTREIFNHCEstablished2022199920011944;2023Annual GWP(USD)642m142m142m462mPerils CoveredCyclones and cyclone-related floodsEarthquake+Rel

31、ated PerilsEarthquake+Related PerilsEarthquake,Volcanoes,Tsunami,Floods,and moreClaims ManagementPrivate InsurersTCIPPrivate InsurersPrivate InsurersPricingPartially risk-basedPartially risk-basedFixed PremiumFixed RateExternal ReinsuranceNoYesYesYesGovernment FundingYesYesYesYesSINGAPORE ACTUARIAL

32、CONFERENCE 202426-29 August 2024Lessons Learnt?Pricing:Pools should not implement full risk-based pricing,since this causes affordability challenges if risk is unevenly distributed.A balancing act is needed to reflect risk whilst ensuring there is enough pooling.Flat premiums/fixed premium rates are

33、 also not desirable,since they provide no incentives for high-risk insureds to implement risk mitigation measures(e.g.TREIF).Indexation:If cover is capped at a$amount,there needs to be a process for increasing the cap over time.RI:Over-dependence on reinsurers should be avoided to lessen sensitivity

34、 to market cycle,but some RI may be useful to dampen volatility.Claims handling:It is best to utilise the expertise and capabilities of private insurers where possible(e.g.NZ).Role in Insurance Penetration:The presence of pools can play a critical role in enhancing this;vital in the context of incre

35、ased construction in disaster-prone areas and climate change(e.g.Flood Re).Eligibility criteria set by Pools:These can be a powerful tool to help governments incentivise building habits which reduce a countrys vulnerability to natural hazards.Parametric solutions:Good alternative option for extendin

36、g cover to less-developed insurance markets.The Future What role should pools play?In todays landscape,pools are an important tool in ensuring that insurance meets the needs of society.The fact that pools exist is a function of the rising levels of economic losses resulting from natural catastrophes

37、.In de-tariffed markets,unless the insurance industry reaches general agreement to deploy some level of cross-subsidization,pools are necessary to avoid unaffordable insurance for high-risk customers.Successful pools require a high level of collaboration between the public and private sector.Pools s

38、hould also prioritise research,investment and pricing strategies which mitigate natural hazards and encourage sustainable building practices.Overall,they are both a symptom of the failures of the insurance industry and an example of healthy public/private collaboration.SINGAPORE ACTUARIAL CONFERENCE

39、 202426-29 August 2024Avoid filling this space with text,will not be seen by audiencePools WP MembersAdam GeorgeCharchit AgrawalDarren MurchSpecial thanks to the SAS GI Committee Pools sub-group from 2014/15 for sharing your research!SINGAPORE ACTUARIAL CONFERENCE 202426-29 August 2024Avoid filling this space with text,will not be seen by audienceAppendicesARPC Mitigation DiscountsTCIP EQ Tariffs